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Advisers expect Lifetime Isa to attract less than 10 per cent of clients


Advisers are expecting fewer than 10 per cent of their clients to demand a Lifetime Isa.

In a survey of 232 advisers by AJ Bell, 70 per cent said they expected the Lifetime Isa to be attractive to 10 per cent or fewer of their clients.

17 per cent thought between 11 and 49 per cent of clients would find the Lifetime Isa attractive, while 13 per cent thought more than half would find it attractive.

AJ Bell head of platform technical Mike Morrison says that the apparent limited demand for the Lifetime Isa amongst advised clients would reflect the age and wealth profile of the group compared to the average consumer.

Morrison says: “Many of them will be over 40 and so not eligible for a Lifetime Isa in the first place and a good proportion that are eligible will already be homeowners and higher rate tax payers, meaning a pension is a more attractive option for retirement planning.”

However, Morrison adds that getting a Government bonus on the first £4,000 of the annual Isa allowance and giving self-employed clients flexibility to invest the cash before pension withdrawal age both presented financial planning opportunities, and that advisers could pick up clients by recommending Lifetime Isas to existing clients’ children.

The Government expects a take-up of 200,000 in the first year of the Lifetime Isa after it launches in April.

The 25 per cent exit charge will also be waived for the first year of the policy.

Savers can pay in and receive the 25 per cent bonus on amounts up to £4,000 until they are 50 years old.

Withdrawals can be made to buy a first home worth up to £450,000 or from age 60 without a tax charge if the saver becomes terminally ill.

69 per cent of the advisers in the AJ Bell survey expected the Lifetime Isa to be used to fund a house purchase, with 31 per cent saying it was more likely to be used for retirement planning.

A survey also released today by employment benefits firm Jelf found that a quarter of employers expect at least some employees to forgo workplace pension saving in favour of the Lifetime Isa.

Three quarters said their employees would not fully understand the limitations of the Lifetime Isa.



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  1. YES, A COMPLETE WASTE OF ENERGY, TIME AND THOUGHT, Typical Govt policy. Why oh Why do they not have a ‘Client Review Board’ to discuss new Policies/Plans before introducing half-cock ideas???

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